Competitive Advantage - AirBlue

Submitted By: Submitted To:

Hajrah Wasif Sajjad Ms. Ayesha Pervaiz

Maria Ul Mulk

Rabiya Anwar

Sheikh Mustafa Mumtaz

Umar Rauf

Zahra Shah
 Competitive Advantage - AirBlue

The world as changed in many ways since John Slyth first introduced a
caramel flavored drink in 1886; Henri Nestle developed the first milk food for
infants in 1867 and scores of airlines consolidated to form a giant
corporation in 1929. These incidents lead to the formation of some of the
world’s most sustainable companies namely Coca Cola, Nestle and American
Airlines. Their capacity to stand the test of time has come from their ability
to develop and sustain competitive edge over their rivals over time, both in
terms of cost and product differentiation. The same principal can be applied
to Pakistanis’ Aviation Industry in general and Air blue in specific.

AirBlue is one of the three airlines currently operating in Pakistan. When it

was launched in 2003, it brought a revolution to the Pakistani aviation
industry by not only introducing a modern business plan but also by offering
new products and services that were an alien concept to the market. Airblue
straight away made an impact on the market and grabbed a major chunk of
the market share from its rivals PIA and Shaheen Air.

What truly set Airblue apart from the competition was the high quality of
customer services it offered. Airblue introduced the concept of e-ticketing,
which reduced costs and gave the customer more flexibility when purchasing
tickets. Airblue is also the first and only airline in Pakistan to introduce the
state-of-the-art self-service check-in facilities at Jinnah International Airport,
Karachi1. Airblue also introduced sms updates in case there were any flight
delays or cancellations. The in-flight experience/service offered was also
rated as the best in the market and comparable to international standard
airlines. Airblue introduced its premium lounge at Jinnah International
Airport; it is for business class passengers, credit card holders and privileged
customers.2 Airblue has newer fleet of aircraft that are more fuel efficient
and do not require very high level of maintenance.

Since the last two years Airblue has not been able to hold onto the
competitive edge it enjoyed over the other players in the industry. PIA and
Shaheen Air have started offering the same services as Airblue e.g. e-

1 Wikipedia contributors, "Airblue," Wikipedia, The Free Encyclopedia,

http://en.wikipedia.org/w/index.php?title=Airblue&oldid=340905866 (accessed February 1,
2010).

2 ibid
ticketing, sms and email updates, frequent flyer reward system etc and its
ticket prices are comparable to those of Shaheen Air but certainly cheaper
than PIA. The in-flight service quality of Airblue has also deteriorated over
the years. This lack of unique features when compared to the industry have
caused the once shining star of the Pakistani aviation industry to slowly but
surely grow fainter and merge with the rest.